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In late 2010 and early 2011, two companies were awarded FDA approval to begin long-awaited stem cell research trials, opening up a high-risk, high-reward opportunity for scientists and investors alike. Two years later, one company is achieving positive results, while the other has circled the wagons and exited the game.

Advanced Cell Technology (ACTC.OB), a biotechnology company from Marlborough MA, has been passing hurdle after hurdle in their path to what they hope is ultimately a prosperous future. On the other hand, Geron Corporation (NASDAQ:GERN) from Menlo Park, CA has not been so fortunate, experiencing all the struggles of a biotech chasing dreams that are bigger than its pocketbook and capabilities.

To figure out how these two biotechs went down remarkably different paths, one must look into the specific approach of each. While the biotech community and investors alike initially embraced both endeavors, the hurdles each company had to overcome to achieve results became quite distinct. ACT decided to concentrate their research on the eye and dry age-related macular degeneration (dry AMD) and Stargardt's Disease (SMD), while Geron went after spinal cord injuries or grade A subacute thoracic spinal cord injuries, to be more specific. While Geron could provide more potential benefit with the results of their trials, ACT decided to get to first base over hitting the home run.

What made it easier for ACT? For starters, ACT has pioneering technology that allows them to use induced pluripotent stem cells (IPS) that provide a supply for research purposes that does not destroy human embryos. This is significant for clearing all the ethical resistance to stem cell research, while maintaining an abundant supply of cells to use for research. Secondly, ACT decided to concentrate their efforts on the eye which is far less complex than spinal cord re-generation and tends to be immunosuppressed or less likely to provoke a response of rejection. Dry age-related macular degeneration and Stargardt's disease are also easier to target with specific cells and physical visual apparatus more or less intact. In the case of biotechs, the hurdles involved with research should be smaller than the hurdles imposed by the FDA.

Despite still having lots of promise, Geron shut down its stem cell trial to conserve cash and concentrate on cancer therapies that are further along in development. At this point, Geron has divested their stem cell assets to a subsidiary of BioTime, Inc. (NYSEMKT:BTX) with the deal set to close by the end of September 2013. Although the intentions of Geron and their focus remain promising, the money and time necessary to achieve any results appeared to be their downfall. On the other hand, ACT has achieved results according to plan and has even observed evidence of engraftment of the transplanted stem cells in addition to visual acuity gain in the treated patients. ACT is so confident in their future that they have elected not to complete a reverse split of their stock that would allow them to list on a National Exchange, despite being approved by shareholders.

ACT has further enhanced their chances of success by amending their patient protocol to allow for the treatment of patients with better vision. Their hope is that many of these patients will be younger, have fewer complications unrelated to the treatment and be more capable to achieve significant results. If ACT keeps achieving positive results, the future of stem cell research will be a boon for investors. At around $0.08, ACT currently remains one penny stock with great promise despite still having so much more to prove.

Any position on ACT is a high-risk investment which should be considered with a very conservative approach.


Source: 2 Stem Cell Research Pioneers And Where They Are Today